Making the most out of a bad situation

Finding the right balance between speed and sensitivity is vital when communicating bad news.

At some point, all PR pros find themselves in a situation where it becomes necessary to communicate bad news - anything from staff layoffs to bankruptcy. Disclosing such information requires a balancing act of careful, yet quick communications to make sure all relevant parties are notified in the best way possible.

"You want to deliver bad news all at once," he says. Most people do the reverse: They try to hide bad news and it leaks out over time, causing a far more detrimental effect.

Honesty is a key factor when disclosing unpleasant information to the public. "Be as transparent as possible," says Nick Ragone, SVP and director of Ketchum's New York media communications and strategy group. "Don't try to hide anything."

"You don't want to sugar-coat it so much that it's disingenuous," adds Carreen Winters, EVP at MWW Group. "But you also need to provide the appropriate context so that people can understand the path forward from the bad news."

The first step involves information gathering and fact-checking. The worst thing you can do is make a mistake, have to retract something, or have erroneous information, Ragone notes.

Knowing your crisis communications team in advance, which could include lawyers, IR, crisis and brand communications, executives, and government relations, is critical. "You have to trust those people [in order to] internally communicate the message and determine what the best way is to proceed in [reaching out] externally," Levick notes.

Timing is also vital. Ragone notes that it's important to recognize when to alert internal employees and constituencies, and when to go out to the vendors, regulators, and issue a press release externally.

The message of leadership should be continually stressed during difficult periods. "People will follow a leader," says Levick, who worked on the pet-food and spinach recalls earlier this year. In each case, consumer anxiety started to go down when the companies came out to the public and unveiled the truth about the recalls. "What happens when you're communicating a cause of action is that people become less anxious - and that's the first goal," he adds.

As part of the corporate communications team at MWW, Winters has worked in situations where there has been restructuring.

"When you're talking about a restructuring or Chapter 11 filing, there's a significant amount of strategy and planning that goes into the day of announcement," she says. The efforts include messaging to external audiences through news media, communications with the shareholders, company customers, vendors, partners, and employees.

Also, legal issues surrounding the filing have a direct impact on what is permissible to reveal. "There's a lot of planning in terms of how to get through the day, to ensure a soft landing on the first day," Winters notes.

The first rounds of communications, which can run from minutes to hours in an urgent situation, are especially important, she adds. Both the agency and company are judged on the delivery of the bad news, often by these initial announcements.

It is imperative to get off on the right foot and establish benchmarks and progress for going forward. Also, using the right third parties to support the rationale or the reasons for the company's bad news can go a long way toward having the message and call to action being received well by your various constituencies, explains Winters.

During the more difficult times, it's especially critical to make sure you show a light at the end of the tunnel. "Provide a road map as to when and how things will get better," advises Ragone.

Breaking bad news is essentially like a moment of truth, explains Levick. Because bad news will always cycle in and out of every company and organization, "what's important in terms of a moment of truth is as much in what we do before," he explains. That downtime should be used wisely to build the brand's reputation and trust before a crisis occurs. Once you have secured the people's trust, he says, bad news can be issued reassuringly.